Reassessing China's physical assets: HALO theme top 100 list released! A batch of slow bull stocks emerging, with 3 stocks' forward P/E ratios as low as single digits.

HALO Trading Booms

In the context of rapidly advancing AI technology, the fundamental valuation logic of global stock markets is undergoing a transformation. On February 24, Goldman Sachs released a major report titled “The Influence of HALO,” pointing out that the market is shifting from chasing “scalable light assets” to rewarding “hard-to-duplicate tangible assets.” This new paradigm, called HALO (Heavy Assets, Low Obsolescence), is reshaping the investment landscape.

Related themes in the A-share market also saw significant gains, with sectors such as oil and petrochemicals, coal, basic chemicals, and non-ferrous metals increasing by over 15% since January, ranking high on the Shenwan first-level industry gain list. More notably, China National Petroleum recently regained the top market cap position among A-shares, igniting investor enthusiasm for heavy assets. Some institutions have recently stated that under multiple driving factors, the revaluation of China’s physical assets is underway.

Reevaluating China’s Physical Assets

In early 2026, Goldman Sachs’ Global Investment Research Department published a major report titled “The Influence of HALO,” asserting that the past decade’s “light assets, high growth” internet narrative will come to an end. Replacing it is a new asset pricing paradigm called HALO. Goldman Sachs states that AI has not made the world “lighter”; instead, it has highlighted the importance of physical capabilities—such as construction, delivery, and power supply—as critical bottlenecks determining the upper limits of the digital future. Against this backdrop, HALO assets have become the new market favorites.

Assets related to the U.S. stock market have performed well. According to Guosen Securities research, comparing the U.S. Infrastructure Stock Index (code: 8884041) and the U.S. SaaS Index (code: 8884025), from January 1, 2025, to February 27, 2026, the infrastructure index rose by 80.59%, while the SaaS index fell by 17.05%, with infrastructure significantly outperforming SaaS. As of March 5, the two indices had gains of 73.41% and -12.49%, respectively, with infrastructure still leading by a large margin.

Guojin Securities notes that compared to U.S. stocks, A-shares are more concentrated in industries such as mining and manufacturing, which are less susceptible to AI disruption. From an industry-neutral perspective, most A-share listed companies have a higher proportion of tangible assets relative to total assets than their U.S. counterparts. Chinese companies are relatively better equipped to withstand AI-driven disruptions. From the perspective of added value across society, China’s manufacturing value-added and material-related industry value-added percentages are also higher than those of other major developed economies. Global investors may find that the resilient HALO assets they seek are widely distributed in the Chinese market, where asset capacity value is irreplaceable. The long-held belief that “productivity equals wealth” is gradually becoming reality. The revaluation of Chinese manufacturing assets has already begun, with capital returning and domestic demand recovery underway.

Guojin Securities further suggests that, amid global technological challenges to industry order and regional conflicts challenging globalization, physical assets that have been overlooked during prosperous periods will become systemically important. Chinese assets, being closest to physical production, are also undergoing revaluation. Recommendations include: 1) Copper, aluminum, tin, crude oil, shipping, rare earths, and gold—assets benefiting from AI development and increased foreign government focus on resources; 2) Chinese equipment export chains with global comparative advantages and cycle bottoms confirmed—power grid equipment, energy storage, engineering machinery, wafer manufacturing—and domestically bottoming industries such as petrochemicals, dyeing, coal chemicals, pesticides, polyurethane, and titanium dioxide; 3) Capitalize on capital inflows, easing of balance sheet shrinkage, and inbound personnel trends—aviation, duty-free, hotels, food and beverages; 4) Non-bank financials benefiting from market expansion and long-term asset return bottoms.

Top 100 HALO Themes Announced

To help investors more intuitively identify high-quality HALO assets in A-shares, Data Treasure, in conjunction with views from Goldman Sachs, Guojin Securities, and other institutions, as well as considering the number of rating agencies and total market value, has compiled a Top 100 HALO theme list.

Industry-wise, non-ferrous metals are the most represented, including resource giants like Zijin Mining, China Aluminum, Ganfeng Lithium, and others. Followed by energy sectors, including China National Petroleum and China Shenhua. Basic chemicals also feature prominently, with companies like Wanhua Chemical and Baofeng Energy. The list also includes utility giants like China Yangtze Power and Huaneng Hydropower, as well as transportation and communication leaders such as China Mobile.

These top companies are characterized by significant heavy assets. For example, China National Petroleum’s tangible assets in Q3 2025 exceeded 1.4 trillion yuan, ranking first in A-shares; China Mobile’s tangible assets are close to 1.25 trillion yuan, second; China National Offshore Oil and Sinopec each hold tangible assets over 600 billion yuan, ranking third and fourth. Some companies have high capital投入, creating high entry barriers—e.g., China Nuclear Power’s total投入 capital in Q3 2025 is nearly 650 billion yuan, while Yangtze Power and Huaneng International each exceed 500 billion yuan.

Some believe that HALO themes are essentially a strong cyclical recovery with considerable volatility risk. However, others emphasize that new demands like AI inject fresh momentum into traditional heavy assets, giving them a “new look.” This unique industry cycle attribute has propelled HALO assets to evolve from pure “value stocks” to “value + growth” dual attributes, establishing their unique strategic value at this stage.

Emerging Slow Bull Stocks

From stock performance, the Top 100 list’s average share price increase since 2024 exceeds 100%, with a median increase over 80%, far outperforming major indices during the same period. Notably, non-ferrous metals performed exceptionally well, with China Tungsten High-Tech nearly multiplying by 7, and companies like Luoyang Moly and Xingye Silver Tin rising over 300%. The chemical sector also saw multiple double-digit gains, including Dongfang Electric, Yuntianhua, and Juhua. Oil and petrochemicals like CNOOC and PetroChina also gained over 90%.

Most stocks exhibit clear slow bull characteristics. For example, Electric Power Investment, XCMG, Shanjin International, and Hengli Petrochemical have not hit daily涨停 (limit-up) in 2024; Luoyang Moly, Zangge Mining, and Tianshan Aluminum have had fewer than three涨停 during this period.

Despite high stock prices, many doubling stocks are not highly valued. Based on consensus forecasts of 2026 net profit, over 20 stocks such as Shenhua, Electric Power Investment, Yuntianhua, and China Aluminum have forward P/E ratios below 20. With recent product price increases, some companies’ forward valuations still have room to decline.

Huaneng International, Huaneng Power International, and Zhejiang Energy each have forward P/E ratios in single digits. Power stocks are valued relatively low mainly due to market doubts about electricity prices. Huatai Securities recently reported that, despite the low probability of power shortages in the U.S. and China amid AI demand surges, power shortages are almost certain. The massive daily global token usage could provide about 10% elasticity to China’s electricity demand and supply, significantly impacting green certificate prices, capacity prices, and electricity prices.

(Article Source: Data Treasure)